A dispute between the government of Panama and the contractors who are constructing various improvements to the Panama Canal could threaten plans of various companies to export liquefied natural gas (LNG) from the U.S. to Asian markets. The dispute, which centers on responsibility for various cost improvements associated with the Panama Canal upgrade project, could result in the completion of the project being delayed for as much as three years. This delay could have serious effects for many companies which have been counting on the expanded canal for their trans-ocean shipping needs. Among the companies potentially impacted by the delay are several companies that have been seeking to export LNG from the U.S. to customers in Asia (especially China). The exporters’ plans are based on the use of the expanded Panama Canal, and its ability to handle larger LNG tankers. Also potentially impacted are the natural gas producers, pipeline companies and others that have been expecting to export LNG through port facilities located along the Gulf Coast.

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